Silvaco Group, Inc. Common Stock Q1 FY2026 earnings call

• AI-driven manufacturing momentum: Secured a new FTCO AI-driven manufacturing customer engagement in Q1, in discussions with several more companies expecting one to close in Q2, and received an order from an existing FTCO customer for new functionality.
• Strategic pivot: Playing to Silvaco's strengths, leveraging AI, targeting markets to build a top franchise, customer obsession, and financial discipline. Leveraging strengths in power, memory, foundry, and display segments. Deploying AI internally and in solutions like FTCO. $20 million cost reduction initiative largely behind us, building financial discipline into the culture.
• Segment details: TCAD bookings and revenue growth driven by FTCO milestones. Semiconductor IP pipeline has roughly doubled over the past year. EDA focusing on core products like Javaro and Utmost.

TCAD: In Q1, TCAD bookings grew 13% sequentially and 49% year over year to $10.5 million. Revenue grew 10% sequentially and 22% year over year to $9.6 million. Growth was driven by milestones for FTCO. Semiconductor IP: Bookings were $3 million in the quarter, down 41% sequentially but up more than 200% year over year. IP revenue was $4 million, down 21% sequentially but up 270% year over year. Sequential softness was due to timing of new customer wins. EDA: Q1 bookings came in at $3.8 million with revenue of $4.1 million. Focus on shifting priority to core products like Javaro and Utmost, with an AI-driven version of Utmost released.

For Q2 2026, expect Bookings of $19 million, plus or minus 10%. Revenue of $18 million, plus or minus 10%. Non-GAAP gross margin around 88%. Non-GAAP operating expenses of $15.5 million, plus or minus 5%. Expect to reach non-GAAP operating profitability for the first time since Q4 of 2024.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed. The risk factors section in Silvaco's annual report on Form 10-K for the year ended 12-31-2025 provides descriptions of these risks.

Q: Talk about the FTCO pipeline, market universe for FTCO.

A: FTCO has diverse users, started with Micron, applicable in various areas like equipment companies. It's a digital twin for simulating actual behavior.

Q: IP business, pipeline looking?

A: IP business looks strong, pipeline organically doubled in last year, saw pause in Q1 but indicators of returning to growth sequentially in Q2.

Q: OPEX guide for next quarter, are levels wanted?

A: There are continued downward pressures on spend, some targeted reductions and investments, trends to flattish.

Q: TCAD bookings run rate sustainable?

A: TCAD is a solid core business, will see growth.

Q: FTCO wins, will it be recurring quarterly event?

A: Hope so, regularly adding new FTCO customers with new applications.

Q: Triangulate within Q2 guidance, TCAD, EDA, IP?

A: IP grows sequentially, EDA could be flattened, TCAD could be up a bit. Remaining performance obligations backlog is at about 46.6 million on the quarter.